Much alarm has been raised regarding the growth of the sovereign debt load in the United States, and rightly so. Out-of-control spending and retarded economic growth threatens the very future of this country.

However, America is not the only place where the debt load is becoming unsustainable. The Communist Party of China has maintained its hold on power by creating high levels of economic growth in order to keep its population happy. This has required double digit levels of expansion and has created an environment of growth with no real long-term economic benefit. China cannot allow this growth to slow, or the population will revolt–having been promised for decades that they can have their cake and eat it too. It’s not a question of if, but when the bubble will burst in China.

Any visitor to the multiple mega cities in China will be amazed at the empty buildings, unused expressways, and vacant cities dotting the landscape, with new construction taking place around them. This is a ponzi scheme of the highest magnitude.

The Chinese can’t stop building. This push to build for building’s sake so people can be gainfully employed has created debt loads of gargantuan magnitude as state-owned financial institutions create more and more money to loan. This creates more and more debt. The corporate and municipal debt totals in China are said to be in the tens of trillions of dollars. The problem is that in a closed society, the real figures are not released.

With a paranoid leadership determined to maintain political control, it is a safe bet that the world really doesn’t know how bad the problem is. Chinese economic data has long been suspect and is said to be manipulated to fit the government narrative. The problem is that this secrecy could mask any leading indicators that could provide the world with a modicum of warning when the bubble does start to burst.

This can lead to a very dangerous situation. If the Chinese government does see a financial crisis that could lead to political destabilization, would they invent a geopolitical crisis in order to appeal to nationalist feelings to take the heat off the government’s economic failure? Would they see a need to steer unemployed workers into the armament industry to prevent civil unrest? Would they need to start a war to keep the population happy? Could we already be seeing signs of this as China threatens its neighbors and rattles its sabers internationally?

I have long said that America’s military is training and equipping to fight the last war (i.e. a low-intensity conflict.) The problem is that the next major conflict could easily be conventional. I’m talking about ships, planes, tanks, and missiles, not special forces on a horse as in the initial fight against the Taliban. We used to train and equip to fight two wars globally. Now we can no longer fight one effectively and are shrinking our military even further. America desperately requires leadership with vision to prepare for the challenges of the future.